The UAW suffered a serious setback when it lost an organizing vote at an auto plant where management welcomed the union. Photographer: Mark Elias/Bloomberg

For Auto Unions in South, Is Chattanooga Waterloo?

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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Well, I was on book tour last week, and then came Presidents Day, so you've had to wait to find out what I think of the failed attempt by the United Auto Workers to unionize a Volkswagen plant in Chattanooga, Tennessee. What I think is that it's hard to read that failure in any way that isn't basically a disaster for the labor movement -- and especially a disaster for the UAW.

As many of you already know, this was a very interesting organizing drive, because the company was for it. Volkswagen AG wanted to set up a German-style works council, which apparently can't be done under U.S. labor law unless there's a union, lest it be deemed an illegal "company union." So the UAW came in and Volkswagen politely declined to contest.

The union lost anyway. There have been some fitful attempts to blame this on Republican legislators who launched a public-relations war against the union drive (a big union in the state would presumably divert some of those union dues to campaigning for Democrats). This is weak tea -- weaker even than complaints that companies "sabotage" union drives because they are allowed to argue to employees, within tight legal constraints, that the union might not be so great.

If the UAW can't win in the South when the company basically invites them in, then it can't win in the South, where all the new auto plants are. Is the problem native anti-union sentiment among Southerners? Did the events of 2008 convince workers that a union would be nothing but trouble? This is a fascinating, and unresolvable, academic debate. It doesn't change the outcome, which is that the UAW lost when it had things stacked in its favor.

That's terrible news for the UAW, which desperately needs to grow. It's not great news for the labor movement at large, either. Auto plants are relatively easy to organize: You have a lot of workers in one place, and those workers create a lot of value with their labor, which means that there's some room for the union to promise fatter paychecks even after union dues are deducted out. Most of the places unions would theoretically like to organize, such as Walmart, are considerably more challenging -- and have bosses who will fight their efforts.

You'd think that now, at a time of great economic insecurity, a union drive would have a lot of appeal. But perhaps that worked against it. The jobs at Volkswagen pay better wages than most in the area. The workers don't want to risk losing them. And there's one thing we all know now: Even the mighty UAW can't guarantee you a job.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

Megan McArdle writes about economics, business and public policy for Bloomberg View. Follow her on Twitter at @assymetricinfo.

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Megan McArdle at

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